Hedged Dividend Strategies: Buy the Stock, Short the Index

Today, the average retiree who is no longer working is stuck between a rock and a hard place. He is told by investment advisors to overweight bonds over stocks due to his limited number of years to recover from any dramatic stock market plunge.Yet safe investments in bonds are producing returns that are at best break even with inflation and at worst inexorably losing ground. Many retirees feel the government official measure of inflation does not accurately reflect the inflation they experience in the costs of food, transportation and medical services. If you believe the folks over at ShadowStats.com, real inflation - measured in the way the US government used to measure inflation - is actually running in double digits already: Around 11% instead of the 3-4% the government cites.Whatever the case, most safe bond funds are paying around 3-4%. Going longer out on the time scale to... Read more